Revenue Bonds
Revenue bonds are a type of debt security issued by governments or municipalities to fund specific projects, like building a toll road or a hospital. Unlike general obligation bonds, which are backed by the issuer's overall credit and taxing power, revenue bonds are secured by the income generated from the project they finance. This means that the bondholders are repaid from the revenue produced by the project, such as tolls or fees, rather than from tax revenues. Investors often view revenue bonds as a way to support public projects while earning interest on their investment.
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Revenue bonds are a type of debt security issued by municipalities or government entities to fund specific projects, such as bridges or hospitals. Unlike general obligation bonds, which are backed by the issuer's overall credit and tax revenue, revenue bonds are repaid strictly from the income generated by the project they finance. For example, tolls from a bridge or user fees from a facility would be used to pay back the bond. This means that if the project does not generate enough revenue, investors may face a higher risk of not getting their money back.